C. D. Book

Why You Should Not Pay Debt Collectors Part 3

In Economy, Uncategorized on April 2, 2011 at 10:36 pm

Part 1 Part 2

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Let’s face it: there are humans out there who live to take advantage of other humans in adverse situations. Debt collectors have been handed a financial windfall due to the massive unemployment precipitated by the Great Recession. Due to consumers’ unwillingness to defend themselves against collection lawsuits and with the cooperation of state courts, third-party debt collectors are raking in the cash.

The big explosion in (collection) lawsuits is coming not from lenders but from firms who buy debt. The four largest publicly traded debt buyers-Encore, Asta Funding Inc., Asset Acceptance Capital Corp. and Portfolio Recovery Associates Inc.-purchased $19.6 billion in distressed debt last year (2009). They typically recover three times what they spend buying debt, according to the Association of Credit and Collection Professionals, a trade group.

Nice payday for collectors = screwed consumer.  Yep, you just might owe the debt however that doesn’t mean collectors should not be held responsible for proving that you them the money.  Especially considering third-party collectors routinely employ scurrilous tactics in their attempts to score a payday for themselves: trying to collect time-barred debt, knowingly filing lawsuits with  no standing and supplying mocked-up affidavits that are robo-signed by the thousands.

Everyone is hysterical about robo-signing by a mortgage company worker who testified that he signed foreclosure documents without reviewing details of each case, says Ira Rheingold, president  of the National Association of Consumer Advocates. What’s overlooked is that…the scale in collection cases far exceeds what we’re focused on now.

Of course appearing in court to defend yourself isn’t for everyone although it should be; many people are too intimidated by the process and thereby give the collector permission to screw them. If you do decide to defend yourself you will most likely be forced to make 2 or 3 appearances in court: judges seem perfectly willing to play the game and turn their courtrooms into cashcows for debt collectors. You will need to answer discovery requests by the plaintiff and submit requests of your own.  Until consumers decide that they don’t want to be taken advantage of anymore debt collectors will continue to get rich by filing lawsuits that have no standing and the courts will continue, with few exceptions, to support the broken debt collection system (pdf).

I’m not advocating that consumers become deadbeats. I’m advocating for consumers to grow a pair. The third-party debt collection racket is just one more indication of the attempt to mold the American middle-class  into a homogenous entity by corporations and their paid-for political puppets.  An entity that must be satisfied with a lesser quality of life so that the top 1% of Americans who control most of the wealth can continue to do so. (must read).

The middle-class of course is expected to pay their debts or be sued and pay their taxes in full yet corporations like General Electric and Bank of America pay zero taxes and  Wall Street is evidently too big to prosecute for nearly destroying our economy.

Do you see the problem?

Links:

Repairing A Broken System: Protecting Consumers in Debt Collection Litigation and Arbitration

Federal Trade Commission Annual Report: 2010 Federal Debt Collections Practices Act

Boom in Debt Buying  Fuels Another Boom : in Lawsuits 

Chase Hit  With SEC Whistleblower Complaint Over Credit Card Practices

Release: Tax Time? Not for Giant Corporations

Why Isn’t Wall Street in Jail?

Debtorboards

copyright 2011 XtraOpinion C.D. Book

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